The following was submitted by Orcas Island School District.
The Orcas Island School Board has approved the budget for the coming school year “with reservations.”
Before adopting the budget, board members voiced deep concerns over the necessity of dipping into the reserve (basically a savings account or rainy day fund) in order to fund it. The board has spent the better part of a decade building this fund and adopted a minimum fund balance policy calling for a reserve of one month’s expenses.
Why is this such a big deal when there’s still money in the bank?
Imagine this: You work hard to put money away, just in case something happens. You finally have enough in reserve to cover one month’s expenses. Then the water heater needs replacing, the dentist’s bill arrives, and your kids want to go to camp. Suddenly, you’ve used nearly two weeks’ worth of that cushion. Sure, you have more than half your savings left, but the car has been making funny noises and the boss has been talking about “restructuring: at work. Your comfort level drops several notches.
So what can you do? You cut back where you can and you put new spending on hold until your situation is clear. Some things will just have to wait.
The School District General Fund expenditures average nearly $850,000 a month. Payroll alone accounts for over $600,000. OISD has to maintain a reserve to ensure that these critical expenses are securely funded until it knows exactly what the ultimate impacts of the state’s new funding plan will be. It is the only responsible thing to do.
Funding for the schools is flat in the coming year, and expenses continue to climb. Even using a chunk of the reserve funds, it is unclear whether we will be able to bring back all of our teachers. That means tough decisions are required to ensure it can continue to offer the best possible programs for its students in the fall.
Using the “fund balance” to balance the 2017-18 budget will cause the reserve to fall below the minimum required by the school board. A bigger concern is whether the district will have to rely on the reserve again in 2018-19 to balance its budget.
District leadership is working to address the challenges the new funding plan presents, to ensure that the situation does not become dire, as it once was 10 years ago. The school board’s priority is the success of all students. As always, when they deliberate their budgetary decisions, they will put the needs of students first.